Czmyr Justyna

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• Czmyr Justyna
• Pujos Sabine
• Vienna Zafeirenia

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Poland

• Area 312683 km2
• Population 38500000
• GDP 422 bn
• GDP per head 11070

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Cracow University of Economics

• Founded in 1925
• One of the biggest economic universities in
  Poland
• About 20000 students
• Each year more than 100 exchange students study
  there

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France

• Area 543,965 km2
• Population 60.9m
• GDP 2,590 bn
• GDP per head 41,970

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ESC Montpellier

• Business school founded in 1897
• about1500 students
• Entered on competition
• Study management, accounting, law, marketing
• Master grade

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Greece

• Area 131,940 km2
• Population 11,262,000
• GDP(2008) 229 bn
• GDP per capita 28,000
• Inflation rate (2008) 4.2
• Unemployment rate (2007) 8.7

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• founded in 1920
• the third oldest University in Greece and the
  oldest one in the general fields of Economics and
  Business
• 8 undergraduate programs, 27 graduate (Master's)
  programs
• 270 exchange students every year
• Exchange programs are also quite active at the
  graduate level

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Healthcare system

• Private insurance
• HMO (Health Maintenance Organization)
• PBM (Pharmacy Benefit Management)

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II. Strategies in the drug industry

• Extensive mergers and acquisitions
• Increasing number of store locations
• Offering many different products and services

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III. A little presentation of CVS

• History
• 1963 CVS was founded in Lowell, Massachusetts
• 1969 Melville Corporation acquired CVS
• 1995 Melville Corporation approved a
  restructuring plan, they decided to concentrate
  only on drugstore industry
• 1998 CVS purchased Michigan-based Arbor Drugs
• 1999 CVS acquired Soma.com, the first online
  pharmacy, and renamed it CVS.com
• 2006 CVS acquired Minneapolis-based
  MinuteClinic

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• Background
• The largest pharmacy chain in the USA
• 7,000 stores across 45 states comparing to 3,888
  in 1997,
• Revenue 87,472 millions (2008)
• Operating income 6,046 million (2008)
• Net income 3,212 million (2008)
• 215,000 employees

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CVS not only a pharmacy

• Retail pharmacy
• Minuteclinic
• PBM services

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Retail pharmacy

• CVS in its stores offers a very wide range of
  products prescription medications,
  over-the-counter (OTC) drugs, health and beauty
  products, cosmetics, greeting cards.

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MinuteClinic

• 500 of CVS/pharmacy stores in 25 states now
  feature a MinuteClinic, the U.S. leader in
  retail-based health clinics.

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PBM services

• Payors and patients count on Caremark for a broad
  range of services, from managing pharmacy
  benefits to filling prescriptions by mail or
  offering clinical expertise.

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• Why is CVS able to succeed?

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CVS strategies major thrusts

• Achieve a superior position
• convenient and numerous store locations
• superior customer service
• attractive merchandise selection
• excellent price-to-value

• Integrated strategy
• establish and expand PharmaCare, a PBM subsidiary
  of CVS
• search out strategic alliences with other
  elements of the industry value chain

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Retail Strategies

• aggressive and rapid program of expansion
• store development
• improve the area of human resources
• use of technology to improve its product selection

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Integrated strategy

• developing Pharmacare ( its PBM)

• pursuing strategic alliances with other
  healthcare partners (Pfizer Health Solutions,
  Harvard Pilgrim Healthcare)

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Core Business Processes

• store locations
• core product categories
• marketing

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1. Store locations

• What the ideal location should be?
• Do CVS need more new stores?

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2. Core product categories

• improvement
• servicing the needs of each customer
• effective category management

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3. MarketingCustomer service
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CVSs suppliers

• generating supply chain
• vendor income compensation provided by vendors
  to retailers who promote their products

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Walgreens

• How does competitor of CVS perform?

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Background

• It was founded in 1901
• The Americas largest drugstore retailer in sales
• 7,000 drugstores in all 50 states
• Revenue 59.90 billion (2008)
• 237,000 employees (2008)

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Differences between CVS and Walgreens
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Growth strategy

• CVS primarily has grown through acquisitions of
  existing pharmacy chains

• Walgreens has focused on internal growth by
  opening (or relocating) new stores.

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Location

• CVS dominates an area by placing a large number
  of stores within it.

• Walgreens locates a single store or a few stores
  in isolated and less populated rural areas.

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Products

• Both companies offer a broad selection of
  over-the-counter (OTC) drugs, prescription drugs,
  health and beauty aids, greeting cards,
  cosmetics, convenience foods, seasonal items and
  some srvices like photo-processing services.

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• Walgreens relies more on front-end sales
  (non-pharmaceutical merchandise in the front of
  the store) and offers a broader product line.

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Comparable sales growth (2008)
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Stock price CVS
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Stock price Walgreens
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• Thank you for your attention!